The global engineering and construction industry continues to consolidate on the basis of a strong global economy and housing market. Total deal value in 2017 experienced a strong upswing from a slow Q1 start (deal value in last three quarters of 2017 rose $1 billion versus the same period in 2016) as companies shifted focus beyond uncertainty to opportunity across the sector. Higher average transaction values can be attributed to the increasing size and complexity of construction projects and the resulting need to provide capable technical expertise. As industry players continue to seek value and win contracts by improving their core capabilities, M&A activity will remain strong.
While a rising sense of nationalism has incentivized the industry to seek inorganic growth within country borders, a weakening dollar presents new opportunities for investment in the US. As the global economy continues to grow, increasing oil prices, government deregulation, a favorable tax policy, and the potential for a new infrastructure bill will make US companies attractive targets for foreign acquirers.
"M&A activity accelerated over the course of the year after a slow Q1 2017 start as companies turned focus to opportunity underpinned by improving fundamentals including continued global economic growth, recovery of energy markets and in particular oil, tax policies changes in the US, and the ongoing need to address existing infrastructure demands. All of which create a favorable economic environment for businesses in the sector and M&A heading into 2018."